Wednesday, November 09, 2005

No it's not price gouging...Okay then what is it?

Okay... so the Oil companies are in front of Congress and they say (while not under oath) that it's not price gouging, it's all in line with other industries...

ummm $25 BILLION dollars in the July-September quarter. Just the ONE quarter????!??!?!?!! WTF? That is more than small countries and most of the Nasdaq companies combined...

Oil company executives defend profits in appearance before U.S. Congress
Josef Hebert
Canadian Press

WASHINGTON (AP) - The chiefs of five major oil companies defended the industry's huge profits Wednesday at a U.S. Senate hearing where they were exhorted to explain prices and assure customers they're not being gouged.

There is a "growing suspicion that oil companies are taking unfair advantage," Sen. Pete Domenici, (R-N.M.), said, opening the hearing in a packed committee room.

"The oil companies owe the American people an explanation," he declared.

Lee Raymond, chairman of Exxon Mobil Corp., said he recognizes that high gasoline prices "have put a strain on Americans' household budgets" but he defended his company's huge profits, saying petroleum earnings "go up and down" from year to year.

ExxonMobil, the worlds' largest privately owned oil company, earned nearly $10 billion US in the third quarter. Raymond was joined at the witness table by the chief executives of Chevron, ConocoPhillips, BPAmerica and Shell Oil USA.

Together the companies earned more than $25 billion in profits in the July-September quarter as the price of crude oil hit $70 a barrel and gasoline surged to record levels after the disruptions of hurricanes Katrina and Rita.

Raymond said the profits are in line with other industries when earnings are compared to the industry's enormous revenues.

But senators pressed Raymond to explain why in the aftermath of hurricane Katrina some ExxonMobil gas station operators complained the company had raised the wholesale price of its gas by 24 cents a gallon in 24 hours. Is that not price gouging? they asked.

Raymond said he could not confirm the specific price increase, but that ExxonMobil had issued a directive in response to the storm disruptions "to minimize the increase in price while at the same time recognizing if we kept the price too low we would quickly run out (of fuel) at the service stations."

"It was a tough balancing act," said Raymond, who said it was not price gouging.

Democrats had wanted the executives to testify under oath, but Republicans rejected the idea. "If I were a witness I would demand to be put under oath," said Sen. Daniel Inouye, (D-Hawaii). The soaring prices have sent shivers through a Congress worried about political fallout.

Sen. Barbara Boxer (D-Calif.), made the issue personal, noting that the executives were reaping multimillion-dollar bonuses on top of multimillion-dollar salaries as "working people struggle" to pay for gasoline and face the spectre of soaring home heating bills this winter. "Your sacrifice appears to be nothing," Boxer told the executives.

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